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Guiding Clients Through Market Volatility

Patti Brennan January 25, 2021

Guiding clients through market volatility

One of the best things about uncertain times is that they remind us to take stock of those checks and balances we put in place to weather life’s storms. As such, finding ourselves in the midst of a volatile market provides the perfect opportunity to reinforce with our clients that the work we have done together to plan their financial future has been time well spent.

Meet Them Where They Are

During the 2020 market fluctuations, the first thing I did was touch base with my clients to see how they were doing. People really needed to talk. Younger people were lonely, not just the elderly, as we typically assume.

A market disruption caused by a healthcare crisis feels very different. Clients are not just concerned about the safety of their investments—but also for the health and welfare of their loved ones.

My outreach centered around reassurance. I spoke to them first of my confidence in the people who are working on a solution. And I spoke to them of my confidence in the planning we have done together to protect their financial health. Taking away the burden of financial worry allowed them to focus on other needs.

There is a saying that ‘Pain is inevitable; suffering is optional.’ A market drop is painful, but we have minimized any suffering through the careful implementation of a financial plan.

But don’t wait for a change in the market to devise a communication strategy for your firm.

Get the Conversation Started

When markets are behaving badly, I reach out to all my clients and the first thing I do is tell them they aren’t hearing from me because the situation is dire. On the contrary. I want them to know I am thinking about them and understand the stress they may be feeling.

I remind them of the safeguards we have put in place to protect against the impact of a market downturn. In most cases, this is all they need to hear. We discuss the ‘what if’ scenarios we have run and how those have shown the resilience of their plan.

If you are struggling with how to start the conversation, I recommend using a “feel, felt, found” approach. While you may recognize this as a sales technique, the feelings of empathy, togetherness, and reassurance it evokes will work to start a meaningful conversation.

You may say things like, “I understand how you feel; There are a lot of people who have felt that way; I’ve found that a quick plan review provides an extra level of reassurance.”

Beyond direct client outreach, I also recommend using your digital channels to reinforce your message. One of my most effective means of communication is through video. It doesn’t have to be complex or professionally produced. Just an informal message reiterating my and my team’s experience in market downturns really resonates with clients and prospects alike.

Back It up with Confidence

Of course, all the reassuring in the world is meaningless without having worked with your clients to create the right plans for them.

Earlier I mentioned running ‘what if’ scenarios. Go into every session assuming the next bear market is right around the corner. Showing your clients how well they are set up to get through these scenarios provides the ultimate peace of mind. You will likely find when you reach out to them during times of market volatility all you will have to do is remind them of these sessions and let them know they are still on track.

Be sure to have a conversation about risk tolerance versus risk capacity. Swings in the financial market are great for helping clients determine their risk tolerance, which is an emotional measure. Whereas risk capacity is the ability of their portfolio to withstand these fluctuations without jeopardizing their financial goals. Their level of risk tolerance may change with market conditions, but you can reassure them that their plan has the capacity to handle it.

Another thing to keep in mind is that your diverse client base may be affected quite differently depending on the causes of the volatility.

During recent events, we saw many industries hit hard—physicians’ offices (especially those offering elective procedures), restaurants, and small retail businesses, while other industries were going great such as car dealerships and real estate firms.

It’s impossible to predict all the ways in which market conditions may impact individual circumstances, which is all the more reason to reach out and have a personal conversation.

Surprising Outcomes

I can’t say enough about how much these times of market volatility can teach us about our clients. During recent events, I found that my retired clients didn’t panic. In fact, it gave them a chance to be more opportunistic.

Those who were especially affected were families with young children. They worried about their careers and how staying at home with their kids could impact their jobs.

But there are also silver linings associated with volatile events. We were reminded that we can change and adapt. It surprised me how much my clients embraced meeting via video and receiving their quarterly updates using technology instead of snail mail. These changes will define how we work going forward.

Additionally, existing clients are more aware of other areas in their lives where we can make a difference. We have deepened numerous relationships through will updates and estate planning.

Reassurance Is Key to Retention and a Great Relationship

Keep doing the things you know work. I tell my clients that they only get to retire once. But I’ve helped thousands of people accumulate assets to retire and stay retired with peace of mind. Let your clients use that tried and true experience and rely on your expertise to do the same.

Uncertainty inevitably causes people to question their financial circumstances. Financial professionals are tasked with reassuring their clients that they’re still on track to reach their most important goals. Preparing clients and plans in anticipation of bear markets, and having personal conversations about their individual situations, helps guide them through difficult times.

DISCLAIMER: The eMoney Advisor Blog is meant as an educational and informative resource for financial professionals and individuals alike. It is not meant to be, and should not be taken as financial, legal, tax or other professional advice. Those seeking professional advice may do so by consulting with a professional advisor. eMoney Advisor will not be liable for any actions you may take based on the content of this blog.

The views and opinions expressed by this blog post guest are solely those of the guest and do not necessarily reflect the opinions of eMoney Advisor, LLC. eMoney Advisor is not responsible for the content, views or opinions presented by our guest, nor may eMoney Advisor be held liable for any actions taken by you based on the content, views or opinions of the guest.

About the Author

A graduate of Georgetown University and a Certified Financial Planner (CFP), Patti Brennan is different. Not only does she provide comprehensive wealth management, she and her team create integrated strategies that are unique for each client. Patti is not just a number cruncher. She has the ability to see the impact of small details in the big picture, and is known for communicating complex, financial concepts into simple, meaningful terms. Patti is a believer in giving back and currently resides on the boards of Brandywine Valley YMCA, Cuddle My Kids, Penn Medicine Chester County Hospital, and eMoney Advisory.

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Welcome to
Heart of Advice

a new source of expert insights for
financial professionals.

Get Started

Tips specific to the eMoney platform can be found in
the eMoney
application, under Help, eMoney Advisor Blog.